A Big Slice of AI

A Big Slice of AI

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  • Microsoft is in talks to invest $10 billion in ChatGPT-owner OpenAI as part of funding that will value the firm at $29 billion. According to Semafor, Microsoft will also get 75% of OpenAI's profits until it recoups its initial investment. After hitting that threshold, Microsoft would have a 49% stake in OpenAI, with other investors taking another 49% and OpenAI's nonprofit parent getting 2%.
  • The software giant had in 2019 invested $1 billion in OpenAI, founded by Elon Musk and Sam Altman. Microsoft's cloud services arm also provides the computing power needed by the AI firm.
  • A recent pitch by OpenAI to investors said the organization expects $200 million in revenue next year and $1 billion by 2024. OpenAI charges developers licensing its technology about a penny or a little more to generate 20,000 words of text, and about 2 cents to create an image from a written prompt.

Why it matters

For several weeks, the tech world has been abuzz with chatter about ChatGPT. The AI model, itself a variant of the GPT-3 family of large language models, has been used for everything from developing code to writing college essays. A bet on ChatGPT could help Microsoft boost its efforts in web search, a market dominated by Google. The company’s Bing browser has only a small share of the global search engine market, however, it is hoped the deal could help the firm chip away at Google’s dominance by offering more advanced search capabilities.
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